tv Squawk on the Street CNBC June 11, 2013 9:00am-12:01pm EDT
>> still writing them. >> and immigration is not some simple debate between the border and a path to citizenship. it has more stuff hanging, more ornaments hanging off of that one and it is going to look just like obama care, and it is more government, government, government. and we have to be careful with that. that's not a simple argument. >> jack welch, thank you for being here. >> great fun to be here. >> we had a great time. join us tomorrow. "squawk on the street" begins right now. we live at the new york stock exchange, and we have a sell-off across the globe and the bond markets, with more worries of the central banks and the stimulus, and the drawing futures down at 2.26, and as for europe, red arrows as well, and disappointment in the bank of japan left policy unchanged overnight. the road map begins with the markets. as we said the tide of the global sell-off crashing on to the u.s. shores.
>> and surprise that the departure of lululemon ceo after the embattled athletic maker. >> and sprint nextel has more than $1 billion battle as it battles with dish network. and more of the administration finds that world shale holds 10 times more amount of oil than previously thought. this morning, futures down sharply on the thought that central banks may wind down stimulus programs and not just talking about the fed. overnight the bank of japan left the monetary policy unchange and no new measures to calm market volatility and meantime, the german court is holding a hearing on the legality of the ecb's bond buying program. we are seeing a spike around the world including the 10-year hitting new 14-month highs. this jgerman court ruling won't come until september, jim, and people are worried about the two-day hearing and the bank of japan. >> i am going say that i feel like i have to worry in order to say that i'm rigorous, i have to
worry, because i don't want to look stupid, but at the same time we look at thursday's low, we will see the buyers, tom koom yung, and because i'm old enough, i can say we are having that again. but i want to be in sync with all of the other negativists. >> what does that mean? >> i'm still skeptical -- >> what does that mean? >> well, you know what, i have just been around and i'm too d old, and i'm saying to you that this is, we want to cause a crisis, you and i, the three of us want to say it is the end of the world, we can go ahead and look great for maybe even 72 hours, and we could do great with an end of the world thing, and we could start now and do it for three days. >> people will forget that we were wrong. that is a lot on the counter. >> well, if it goes down big, and we said it is big, we are geniuses, but if not, we said it is wrong, so what. we will say it will happen.
i don't want to be too facetious, but rumblings overseas and qe2 is ending, and we had dave teper on "squawk box" and asked if it is going to be happening and if it is good. it is happening and people are saying it is horrible. >> a period of adjustment as we may start to realize that we may not see 1.6 on the 10-year ever? >> well, it is just that we don't have to do it at the speed of tesla. sorry, tesla. speed of a macerati, oh, sorry, italy. and we can't do it too quick. that is too quick. >> and aren't there legitimate worries that the bank of japan is for example not managing the expectations as well as they could? >> well, you know, i'm going to come back to the fact that if there are -- there's about 100 markets in the world, and then pakistan and the united states. pakistan being the best performing market. no, i mean, again, what i saming
is that we can sit here and debate how bad the ecb is, what is going on in thailand, how japan is doing badly and then we come back and we are stuck with bristol-mye bristol-myers, and stuck with the fact that merck has come up with an unbelievable new product, and stuck with gilead solving hep c and i'd like to get the stocks down, but they won't comply with my negativity. they won't comply. so what do you do? just pick them off individually? >> all right. answer the question. what do you do? >> you wait for the whole market brings things down. and maybe they don't, they ignore the sprint hire bid and take that stock down and buy it. you look at the individual stocks, and i'm supposed to be a macro guy, and risk on/risk off. i did don't the harvard to get stupid. but i do feel that what has happened is that individual stocks d s keep prevailing so b brushes about thailand and i will say that south korea is next, because i have the south asian finances up on wikipedia,
and i'm looking for a genius with the wikipedia, but in the end, i'm stuck with the four walls of the stocks that are doing well in the u.s. >> and boeing is upping the 20-year jet forecast. general mills upsets the guidance. >> amazing. >> and techs had good things to say in the mid-quarter update. >> and general mills, and this is a great idea. ken powell, and stocks down, and ken powell is incredibly able ceo and he could choose today to say, you know what, i remember 1997, and i remember it all started in thailand, and thailand was down 5% last night, and thailand was down 5% in july of 1997 and i'm not going to raise the forecast. >> but that is a forecast in thailand. >> but it is still today. >> people still relive the last crisis and don't forget that in 2007 credit started to deteriorate right around now, and we started to see the real poor performance of residential backed securities for example, and i'm not saying it is
anything like this, but you have a backup of the credit going on right now and may be caused untold pain right now in credit area areas, and so you do have to go back to when the stock market hit a high in october of 2007 while the credit was -- you know. >> well, right. i think that the country is in better shape. we were about to go -- we were ow of control, and impatient capitalism, an unregulated by any entity whatsoever, and we are filled with regulation. >> all true, but credit can lead the equity markets and it is doing it now and it did it properly and people were not paying attention in 2007 and now they are. >> and now we have the calvary ready, and they have tanks this time, but use the boeing example. the s&p 500 takes it down, and people forget about mcinnerny and doesn't he understand that the tide back, and what is he looking at, the dollar?
and no, he is looking at the order book. and the order book is not going to cancel. >> no, it is not. >> and now the chinese, and if you want to know where the wheels are off of the bus, it is in china. the wages are going up dramatically, and you know -- >> talk about a credit problem. >> talk about communists, and workers rights for those incredible communists, and suddenly the workers matter in communism. what is that about? >> well, you have to put it in perspective because it is a extraordinarily low rate of b borrowing for the u.s. government and so many corporations, but we all know that cheap money has helped to fuel the incredible rise of the equities crisis, and they are buying boeing and other products out there as a result to have incredibly low rates of financing or simply buying back their stock. >> and so has that not been a continual theme since march of 2009? >> yes, it has been, but how
much of that is a part of the huge rally we have seen? >> well, two points, one, i totally respect the futures and a lot of people who have underperformed this year, and are making a stand right here and right now and telling you that this is the big unraveling and then the ken powells of the world who are telling you, look, what a great opportunity, and the great opportunity here, and pepsico's stock broke out yesterday, and companies like bb&g, and they are buying pirate's bounty, and what does that have to do with pickles. that is the biggest pickle company out there other than heinz, but all i'm saying is that i respect the macro, but in tend, i'm stuck with the micro, and stuck with general motors doing better than expected. today, there's a story out about the citi, about to lose $7 billion. $7 billion is a lot of billions. >> it is a lot of billions. >> and citi down and then the ceo delivers a decent quarter and you say, what was the reason
why i sold citi? oh, that is right, the $7 billion number which is like how much jpmorgan lost with the whale. and remember, a debate in "the new york times" whether it was $5 billion and $9 billion and the stock went from 43 to 33, and was that the time to sell and run and is that the time to have cut our losses? >> all understood. >> well, speaking of losses lululemon's shares taking a hit as the ceo christine day is stepping down, and that news is overshadowing the company's bert than expected result. since day took over, the shares have soared almost 400%. the announcement of her departure after lululemon recalled the yoga bottoms because they were sheer, and pants have been returned to the store shelves and not the only problem. merchandising is open, and others as well. >> i thought h it was stagg-- tt it was staggering, because the worst quote on a conference call, the time is right for the
new person to leave. the timing could not have been worse for a new person to leave, and if you ask me about how the earnings were, i'd say, well, mrs. lincoln, how was the play? >> well, you know, it is interesting because you have watched this problem and you looked into it, and then you came away thinking that this lady is a great merchant. >> yes, absolutely. >> you have been supportive of her, and she is not leaving today. >> no, but she is not staying on the board. >> she is gone. >> look, this is a moment for her, and she said, look, we are not going to sell pant, and this is the most important product line according to the conference call and this is not going to be inferior and i liked her on the board of starbucks and considered her to be one of the great executives of the era, and she is gone, and i don't know who is going to run lululemon. >> there has to be a story behind it, more to it, don't you think? 51, doing a good job. i mean, all right. past that potential crisis where the people were considering whether she would keep her job,
and i don't know the story, but -- >> it was a shocker. >> and with the -- >> i can't find out what is happening. >> and the p.e. near 40 and no room forrer error or uncertainty? >> well, we will retrace the gains that -- i don't know, she is really good. i don't know what to say when somebody fabulous kind of exits the building. it is kind of an elvis moment here. with where'd she go? i was shattered by this one, because -- >> did you sell the stock? >> yeah. yeah. >> and the usb downgrades today, and can of cords staying with it? >> well, christine day is a great executive and i stood by her saying that you have to buy into the pants flap, and she takes away, and maybe she would build a great team, but the chief marketing officer gone, and this is not a cheap stock. nike is a cheap stock versus this, and nike has a lot of good things going, and i'd rather be in nike than lulu, how about that?
i was down. this is a shocker and the call was a bad call. >> was it? >> yes. >> well, it was like, hey, you know, generally when the ceo unexpectedly says see ya. >> and the new store opening, and you see like, like you are really important and you are gone. just kind of took your breath away. plus, no other earnings than annie's reported and so it is not like, i have to do another 30 conference calls, no, just her. and it is the wrong day, and i picked the wrong day to report. you know what i mean? >> well, you know, when we come back this morning, stay tuned for a live interview with brian roberts our boss and chairman and ceo of comcast and our parent company and he will explain the strategy of wi-fi growth, and also the richest man speaking out to michelle carruso cabrera. and also, triple digit downward play on the futures and we will get the opening bell in a few
moments when "squawk on the street" comes right back. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. but i see a world bursting with opportunity,ople nervous. with ideas, with ambition. i'm thinking about china, brazil, india. the world's a big place. i want to be a part of it. ishares international etfs. emerging markets and single countries. find out why nine out of ten large professional investors choose ishares for their etfs.
ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. ♪ if you have high cholesterol, here's some information that may be worth looking into. in a clinical trial versus lipitor, crestor got more high-risk patients' bad cholesterol to a goal of under 100. getting to goal is important, especially if you have high cholesterol
plus any of these risk factors because you could be at increased risk for plaque buildup in your arteries over time. and that's why when diet and exercise alone aren't enough to lower cholesterol i prescribe crestor. [ female announcer ] crestor is not right for everyone. like people with liver disease or women who are nursing, pregnant or may become pregnant. tell your doctor about other medicines you're taking. call your doctor right away if you have muscle pain or weakness, feel unusually tired, have loss of appetite, upper belly pain, dark urine or yellowing of skin or eyes. these could be signs of rare but serious side effects. is your cholesterol at goal? ask your doctor about crestor. [ female announcer ] if you can't afford your medication, astrazeneca may be able to help. the sprint offering by 1.5 billion which amounts to a 50 cent a share raise, and softbank
is raising the cash component that the shareholders of sprint will get to $5.50 a share from 4.02 clrz a$4. $4.02 and they will have a significant increase of the offer from softbank and it was clear to those of us who follow it closely that it will be close if not a lose ear at the vote tomorrow on the current deal to acquire control of sprint. don't forget of course, softbank, itself, is already invested $3.1 billion in sprint way back when they announced the deal last year. they bought stock in a convertible at $5.25 a share giving them 17% stake, and it is complex, but all of this comes as a result of that, well, let's call it a bid that might not have been a full bid from dish that is still out there. dish has until june 18th to try to firm up what might be its
offer, but at this point, that offer is not deemed in any way superior, and in fact, this deal is deemed superior to what dish has come forward with, and that company has been doing due diligence, jim, and that gets us back to charliergan, but what we have here from softbank is significant increase, and u.s. sprint holder will get $5.50 a share and continue to own 22%, so you will elect cash stock, but you will own a share as well. >> what a great deal. >> and people are trying to figure out what that is going to be worth. >> in other words, you get $5.50 on some, and then obviously -- >> well, 22% essentially. >> right. >> and sprint not taking in as much money for the sale of primary shares as they had previously. and something goes up by $1.5 billion and total consideration, but it reallocates $3 billion to go directly to sprint for new shares and would go into the coffers to help with the build-out with the transition
that it is currently undergoing. >> and david -- >> and instead, they cut it to $1.9 billion and a lot going on here, and i realize that we have prepared a full screen here, but this is going to be done in the 21 days people need to understand as opposed to charlie ergen to come to the end of the year. i have talked to plenty of regulators and it will take them with all of the specs a year to a year and a half to get the deal done. >> why are they upping the bid, because they are bidding against themselves if it is a climbable curve. >> well, he can't buy all of clearwater, but what he has done for sprint shareholders is to make them a lot of money. >> well, dan hesse had a board to make this deal sweeter.
how do you make it -- >> well, you had big shareholders like paulson who said, softbank, we won't vote for you and now paulson and company who is one of the largest shareholders here will support the current deal. it look likes the deal is going to occurs, and then we'll be talking about the competition that will be brought to verizon may 18th. >> that is a different story, and you are talking about a july closing? >> yes. >> and that is incredible. no japanese security? >> no, it is signed off on and just the fcc. it took a while. they started in november. >>ergen didn't have a chance would you say? >> no sh, the bid, carl, it was difficult to understand in value, and there were questions about the further investment that is needed. he did some due diligence, but it is just not clear where it fully stood. i don't, i think that there was a willingness on the part of the special committee to really consider him if he was real, but
it was always difficult to ascertain, and i believe that he was, because you can make an argument for the link up in some ways, but there are a lot of other questions including the timing as i pointed out, and financial resources to continue the build-out that is needed for the company as it tries to transform itself. >> did his company own any sprint? >> i don't think that ergen, i don't know, but he owns clearwater and they have been in that stock plenty. but i don't know about sprint. it is hard to know charlie, because he owns clearwater and a lot. >> well, he succeeded in getting everybody money, and maybe including himself. >> well, jim. >> and look, the guy has some motivation here. >> well, absolutely, and when you figure out what it is, i want you the let me know. >> i think that he is a smart guy. >> no doubt about that. and skrcrutiniable.
>> and krcramer will tell us abt his "mad dash" next, and take a moment in futures and see if we can work out of this one on a tuesday no lez. more "squawk on the street" from the nyse straight ahead. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ has a lot going on in her life. wife, mother, marathoner. but one day it's just gonna be james and her.
so as their financial advisor, i'm helping them look at their complete financial picture -- even the money they've invested elsewhere -- to create a plan that can help weather all kinds of markets. because that's how they're getting ready, for all the things they want to do. [ female announcer ] when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far.
dash" before the opening bell. how is apple going to look today? >> well, this is important, any company that announced the changers in the operating system, and sleeker and pandora and making it so that the phone, that one of the offings could last 11 hours, talking about a beautiful new phone in a world where we care about style or some are supposed to, and we would say, this is exciting, but this is apple, david. we expected them to announce an iphone that makes it so that your car works on water. i mean, we just -- >> when is that coming by the way? >> that is the 2017. it is incredible. and people, and when the people on stage said innovate and people said that apple can't innovate. look. what we are used to from apple is seeing something that we didn't know that we just, how did we live without that. how did we live without the tablets, david? how did we live without the smartphones or the new operating system, no. they are one step ahead of the posse. >> and incremental changes and things like this, do they at
least increase the allegiance to the network? >> well, the ecosystem is preserved and it is not like amazon and we are -- not amazon the stock and company, but like brazil where we are burning down the rain forest, and the rain forzest preserved and it is like a moratorium on burning the rain forest, but it is not enough, but a it does not produce higher e earnings, and in the end, it is a stock. i mean, we are stuck just like i said with the four walls of bristol-myers, we are stuck with the fact that you cannot raise the numbers off of what happened yesterday. that is in the end what controls. >> so do you think that by making a big, and i know that the developers conference that is what they do there. >> they are angry. >> does it obviates or says there is an absence of new products? >> no, we will come up with something better than samsung and you should think about our phone, because it is going to be better, and in the world that is, you go to the verizon store and check it out and it is going to be looking good and you may buy it, but in the world that is stocks where we want to raise
numbers apple, they didn't give it to us, and so there is a schizophrenic thing here, and in tend, it is better. the new phone is better and the radio offering is better, but it is not enough from the company, because it is like saying that hewlett-packard has a good looking tablet. we don't want something from tablet that is prosaic and pedestrian, because we want to be blown away and say, did you see the developer's conference? you feel bad for them, and feel bad for billionaires, no. that was good. good work. >> and talking about not so good here at the open. we are back with all of the market action today, and looks like a rough open if at least you are long. [ male announcer ] this is george.
[ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ yeah, let's see, you are watching "squawk on the street" live from the financial capital of the world. the opening bell is set to ring in 30 seconds. jim, people think that the market has no memory, long-term memory and not only been able to put together three dow days for the dow, but three days con sek eyetively since the end of april. it has been two and two or one
and one and incredible. >> it is remarkable, because what happens is that creates a grinding negative psychology even though the average has been good. one of the things that has worried me and i want to put it in the context of things that could go wrong is that we had the so-called goldilocks number and the interest rates went higher, and yesterday higher and today higher, and that has to stop. it is too fast. >> yes. >> that has to stop. you can't get a traction in market when rates go up everyday. it doesn't work. >> there is the opening bell and looking at the s&p 500, and weak breadth at the open, and looking for a triple digit gap down, and today, etf provider funds, and joseph a. bank doing the honors. you ever heard of them? >> i think that jim greenberg wears that exclusively. >> what is he, johnny carson. >> ba bum-bum. >> and i'm thinking -- >> is i am thinking of the sports jackets.
>> and the name is trotsky, and that is my favorite. russian prudence. >> and today, the global estimates of shale oil are raised and we seem to keep coming back to this area. >> oil is so manipulated it is scary. not by the traders, but the middle east chshaikhs, because is out of sync with copper and nickel and aluminum, and oil is even though iraq is pumping twice what it is, and we are pumping and back to the '94 levels, doesn't matter, because the oil does not come in and that is the most important commodity there is. >> why not? >> because they turn the spigot on and off whenever they want to over there, and we are not independent, because we don't have an energy policy. >> oh, you hit the key there, and we haven't had an energy bill in years and unified energy policy even though we are produce morgue than ever, i believe. >> no. >> not ever. >> not ever, but i think that it
is a relative thing, because i am thinking of how much is importanted, but yes, we are finding pru doe bay after pru doe bay which is incredibly big in the '60s to give us a eagle is that, and ballkin is that, u but it is not affecting our own oil price, because we can't get it to the jones act which is arcane piece of legislation, and we are exporting a gigantic amount of product from around the world and it should make people angry, but they are not awa aware. >> you talked about the rates raising fast and today the losers are lenar, and louisiana pacific, and d.r. horton and are you expecting real pain in housing? >> no, because when the rates go up, people feel at a certain point, and the velocity move is so difficult that it is difficult to get what rate, and nobody wants to go to the
banning and bank to get a 3.75 and they say 4.and now you say 4.25, and nobody wants to buy in that environment, so it will slow. but towle is giving up everything in that quarter, and that is excessive, but now it is rolling over. the charts are playing where things are not happening so quickly and i drew up the charts tuesday and i have a chartist who is very negative and i found myself saying, well, what about the fact that the orders are good at the home builders? well, that can't hold up. that is the whole rap that i'm hear hearinger, it can't hold up or stay like that. >> can they chart the 10-year? >> 2.73, i mean. no. i mean, these guys are negative the chartists, but they are trend followers. it is not like they are doing some sort of high energy physics over there. >> the most, every dow component may be in the red for the moment, but an upgrade at disney over there at mckwquarry, and t
target is 75 to 70, and they are talking about the theme parks in particular, and more billion dollar franchises out of the avengers and star wars and espn is at the top of the game. >> yes, and completely, looking at the franchise and marveling, because you can't time shift it. at the same time disney did announce that midday shakedown that has caused the stock to take a hiccup. i want to look at it again at general mills, because general mills says that things are better than expected and the stock is off 22 cents. watch that stock. if it can reverse today, that means we have a decent market, and if it can't reverse, then a couple of days of pain. >> you seem to be discounting, what is the discount for so that when we actually start to see the tape or be september, october, november or not until next year, we don't have a sell-off at all when it actually happens. >> well, that is the david tepper's thesis which captivated america for a couple of days. >> 20 minutes. >> and back to the chartists, and jim, we are at the dave t
teper resistance level, and i didn't know we were hitting the t tepper level. and christine day resigning, and lulu lemon is a stock going on all cylinders and maybe a pool of good management overriding the futures, and i'm watching a couple of stocks, disney and other so stocks that are up on the day, because if they can turn around on the day, it means that people are caring about the individual fundamentals, but right now they obviously don't care at all, because everything is down, good and bad. >> except for sprint which is up a little bit which with we might have anticipated, but not a large amount. june 25th is the new shareholder meeting, and it does look like at least at this point, unless we get a real significant change in the posture from dish, this is going to carry the day for softbank. i have gotten a lot of questions on clear wire as we do, and this is the situation that softbank
has given the indication to go ahead. and charlie ergen is going to tender for the whole thing even though he won't get the whole thing, but 25 to 30%, but if he drops the condition, he can get the tender done, but that is where that stands, but the question right off is why not the incremental dollar amount for them to try to rest clearwater from ergen, and they don't seem to be going there as they were willing to do on sprint. >> other stocks up like sprint, how about dole food, mr. murd h murdoch. >> yes, we will talk about that in the faber report in a little bit. >> that is a nutty one. >> it is nutty. >> speaking of shareholder meetings, facebook has the first shareholder meeting ever since going public, and we will look at updates on user engagement, and the average daily users and zuckerberg's promise not to sell stock until september of this year, and it has struggled, and
struggled in markets good and bad. >> and yesterday, johan said very well on the show, that he upgraded and timing is everything. we are down 150 dow points and the end of the worlders are everywhere and people are saying, look out, you have no idea what is going on in malaysia and i would say, you bet i don't. i never have and never will. singapore came there and i don't think that means making chairs. >> well, it is a nice city. >> you got that edge on me, then. >> i spent a little time there. beautiful. >> bob pisani is on the floor watching what is going on. >> well, it is not hard finding out in malaysia or philippines or elsewhere, because it is rising rates. simple story, the rising rates are the story today and yesterday we with are awe of the rates and higher interest rates on top of the fragile glowbabal economy is negative or no growth, and that is the headline
which is simple at this point. we are seeing the rising rates hurting the commodity stocks, and rising rates hurting the emerging markets rather notably, and take a look at the commodity stocks this morning. this has been going on forever, and these stocks are ster lite which is a copper stock, and that is down, and rio tinto has to be a 52-week low if not damn close it to or darn close it to, pardon my language there. and commodity stocks, and down, and aluminum and zinc and the aussie against the u.s. dollar, and look at that. that is the lead for what is going on in the commodity s sector. all of this higher u.s. rates and talk of bond purchases, tapering bond purchases by the fed is hurting emerging markets, so we will see, and mention the philippines down 3% this morning, and there is the eem, and the emerging markets etf, and that is the main one that
people hold when they talk about the emerging markets, and that is a new low for the year. you are seeing the side effects of higher interest rates which is why i would say that we could use stability in interest rates for few days or weeks for a few days the sort it out. no big move out of bonds and inso stocks and we are talking about the great rotation, but let me tell you that wait until they get their second quarter numbers here. now i said that a couple of months ago, it will take a few quarters where investors get the quarterly statements to say, huh? s&p 500 up 3.8%, and my treasurely bond fund down 4.7%? good heavens, is that possible? well, if this is now the second quarter of losses and the long-term treasuries and the tlt has been down four quarters in a row, and when you see the corporate bond funds where there is a lot of money into down side, not a great rotation yet, but it is going to get people talking when they get their quarterly statements, and that
is only going to be, david n a few weeks. back to you. >> that is going to be very interesting and thank you, bob pisani. >> and jim mentioned it, but let's talk about dole, and it is not that large of a company, but a well known name given the bananas and the strawberries and the chairman and the ceo david murdoch is about 90 years old and on and only-fruit diet and he says he will live to 125, and he offers 12 shares cash which is roughly 60% of the company that he does not own. mr. murdoch has done the same thing or pulled off of the company about 11 years ago and a larger company back then that you may recall and had packaged food business and other significant assets and managed to take it private and public again, and back then, 24%. this is old school it feels like. 40% owner, and chairman and the ceo, and by the way, things are not going well. they have had a -- take a look at the news on the company recently. they were on the call, and there was supposed to be a buyback or
said it was in the press release, and said, no, no buyback and three weeks later, they put in a buyback and then s suspended the buyback and large buyback and had an impact, and meanwhile, the earning are not doing well. that had a banana issue and strawberries became an issue for the company in the last quarter. >> well, the land value. >> and now he sold la ni to ellison. >> yes. for $500 million. >> better than expected number. >> all of this is come back to -- and by the way, take a look at the option trades and regulators if you are listening, there were strange options trades last week, 30,000, and they were in the money, but 30,000 contracts out of nowhere. >> well, you did raise the key point everywhere, because i have the same information he does expect to live 125, and so he is taking a longer term view. >> he is. >> that fruit ain't going bad. >> and we agree with him a special committee formed, but this does feel a little old
school here. >> it does. >> and not like they are going to be able to sell to anybody else with mr. murdoch ostensibly saying i'm not selling to anybody, but i'm a buyer. >> when you are 90, do you have to play by the silly ses rules? >> well, he is grand fathered out. >> there you go. >> i was wondering about that. >> he didn't get memo that they passed the 34 act. >> right. and so we will see if he is successful, and other analysts, janny saying that 12 is not a bad price, but it is off to the press to earnings, and multiples in the group are higher, but the p performance has been better at some of the other companies that compete along with dole. such as chiquita or del monte certainly, and so keep an eye on it, but dole foods is one of the better performers today on the $12 a share with the cash off buyout by mr. murdoch, the owner. >> and he divested the high margin packaged food product, and he treats it as a private company.
>> yes, he controls the company. >> but there are people along with him. >> there are, but in those situations, you need to be careful. >> that is right. you know what we should do, david? head over to the bond pits. >> yes, i want to know what is going on there. >> and rich santelli is at the cme group in chicago. rick? >> well, about 4:00 a.m. eastern, the treasuries went t hot. what does hot mean? it means that 223 was yesterday's intraday high yield and the same high yield on may 29th. but when you expand the range and get into a new zone, that's going hot. that is a proactive market, and stretching out, trying to expand its range. and that expansion process, well, many investors and many other sectors take notice, like equities. we could talk about the catalyst for the rest of the day, bank of japan, and variety of issues and i want to talk about the markets. what did this cause? well, it caused the cascading effect, and if you look at the
24-hour chart jbs, you will see that they will go hot when they start to get above 1%. you want to watch 1%. look at what is going on in italy, spain, and their 10-years are each up about a bakers dozen, 13 basis points. and merging markets and this may sound silly, but i feel sorry for them, because they have to deal with the batons by allduct b banks and watch the chart of the 10-year mexicans, and one-year high yield, and switch gears to the central exchange, and the leverages and the kerry trade whether it is dollar yen or euro yen, it is the extreme levels and we will go hot on the dollar yen and if it breaches 95, pay attention to the level. carl, back to you. >> thank you, rick, so much. time for something we call "kelly time" here at post 9:00,
and we need graphics there. >> well, i slightly disagree with rick, about feeling sorry for the emerging markets. but some of the route that we are seeing, and we can look at a couple of the etfs and one is a play on the emerging market debt play, and that is what you are looking at now, look at the sell-off that we have seen over the last month or so, and the year-to-date down 10%, and te mortgaging equities the same story and basically seeing people bailing out of the countries. now, this is partly because people like the prospects in the u.s. they like the stronger dollar. they like the fact that the economy appears to be relatively intact. the trouble for some of the emerging markets is that all of the time they have bought over the last, you could call it a decade, really, when looked as though you wanted to be in the emerging markets, because forget about the developed world, because they were in is so much of a mess, and that narrative is starting to change and the problem for the markets and we have seen it, jim, and talking about the late '90s a precedence
here, and they don't do well the dollar valuation, and you mentioned malaysia and asia, and it is not pegged to the dollar, but it is the same story and this is something that i would imagine you would agree with to some extent, this is more trouble for the emerging markets than the u.s. necessarily. >> and remember when gold started to go down and sud lin the etf was the tail that wagged the dog. all of the etfs and in '97, i was trying to explain on "good morning america" why it matters and nobody owned the debt and now people are in the debt to pick up yield through an etf that didn't exist. >> exactly, and it goes back to what we are seeing for example in turkey. a country with a bigger current account deficit than america, and it is funded by foreign net inflows and people are concern and pulling the money out, and that is why there is a problem there, and a lot of the countries face the same issue. >> live shot of turkey there as you are talking about it. >> i used to have a big position
in arcelic, and my investors would say, what the heck is that? and i would say the turkish etf and you should have shorted it. >> and the indian rupe. >> and they don't have enough to buy it. >> yes, it is like gold finger. >> but with the emerging market accident, this could be once again. >> well, stay close to it. i'm not cynical, because the etfs have changed the equation, and everybody owns everything now, because the etfs are like the ads and like -- well, i have to get into that emerging growth on fund because they yield 4 and i'm only getting 2. >> thank you, kelly. sony hoping to score big and will playstation 4 help it win the gaming? we will be joined from e-there 3
as they make the case for the ps4 and will the dow continue to go down? and here are a few, and we mean few of the morning's bright spots. we've been bringing people together. today, we'd like people to come together on something that concerns all of us. obesity. and as the nation's leading beverage company, we can play an important role. that includes continually providing more options. giving people easy ways to help make informed choices. and offering portion controlled versions
of our most popular drinks. it also means working with our industry to voluntarily change what's offered in schools. but beating obesity will take continued action by all of us, based on one simple common sense fact... all calories count. and if you eat and drink more calories than you burn off, you'll gain weight. that goes for coca-cola, and everything else with calories. finding a solution will take all of us. but at coca-cola, we know when people come together, good things happen. to learn more, visit coke.com/comingtogether [ male announcer ] citi is over 200 years old.
in that time there've been some good days. and some difficult ones. but, through it all we've persevered, supporting some of the biggest ideas in modern history. so why should our history matter to you? because for more than two centuries, we've been helping ideas move from ambition to achievement. ♪ and the next great idea could be yours. ♪ xx you asked me why i'm
building the largest home in america? because i could. >> that is not my room. that is my closet. >> the queen of versailles premiers tomorrow 9:00 p.m. eastern and pacific. the dow is down 128 and looking at the components here, disney is flirting with the flatline and virtually the only component that is even getting close to green. >> how horrible, carl. >> well, look at that. >> the versions of mean on tuesday. and meantime, apple is releasing a new commercial releasing the motto "designed by apple in california" which is put on the back of the products. take listen. >> we spend a lot of time on a few great things until every idea we touch enhances each life it touches. you may rarely look at it, but you will always feel it. this is our signature, and it
means everything. >> hmm. brings us to the "squawk on the tweet" and tap your inner don draper, and what does apple want you the feel on that? tweet us and we will get to the responses later on in the morning. touchy feely here. >> and we were conflicted on the ocean spray accounts and had to keep the sun kis. >> and emotional by design. >> and the journal this morning tries to argue in their words that good looks only get you so far, but still for payments and messaging and for maps, and people are still going to the rival's products. >> that is the problem to solve. >> and they tried to stay one step ahead of the posse, and they are an angry and defensive compa company, and that is a shame. >> don't forget they cost more, too. >> yes. >> you are paying for the design. >> look, speak softly and carry a big cell phone and put it out and say, look, you go see whether you like it more, because you will like it more,
and leave it at that. you don't have to say, hey, listen, we are innovating our butts off. you don't need to. >> you don't even the times today would not put in quotes what he said. 6 in 60 coming up next. coming up, there are some things that you should never rush into, like a wedding. but sometimes 60 seconds is all you need, and that is what we are giving krcramer to discuss x stocks when "squawk on the street" returns. he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at aflac.com.
the dow is down 120 this morning and let's get "six in 60" with jim. data? >> red hot and initiates today, because it has been out for months, but ubs is to buy more but be careful, because the stock has had a major move. >> and restoration hardware? >> well, question these things when jeffrey says to come out the buy it. do you know what the quarter is and that said, the company has done well. >> and quest corps? >> well, they have been a good stock and cooled because of the generic competition, and they bought the generic competition. >> and morgan stanley's
qualcomm? >> well, they are in the slowdown in cell phone. >> news in radio and pandora. >> the stock is up, and i thought that apple took aim at them, thaw but they didn't kill the king, but shot them. >> and this one this is. >> no joy in voya and nobody came out with the neutral and nobody excited about it at all. >> what about tonight? >> i am continually involved with the energy sector and whether we are going to become the great energy power and we talk about it a lot, and spectra energy is one of the great pipeline companies who have a pipeline coming from marcellus to new york, and the last six miles is almost impossible, but they are doing it. and another one, medidata a medical records company. i'm excited about that one. >> and we come back with an exclusive of the world's richest man in a moment. tdd# 1-800-345-0 that i haven't even looked away from my screen.
tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 that kind of focus... tdd# 1-800-345-2550 that's what i have when i trade. tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 and the streetsmart edge trading platform tdd# 1-800-345-2550 from charles schwab helps me keep an eye tdd# 1-800-345-2550 on what's really important to me. tdd# 1-800-345-2550 it's packed with tools that help me work my strategies, tdd# 1-800-345-2550 spot patterns and find opportunities more easily. tdd# 1-800-345-2550 then, when i'm ready... act decisively. tdd# 1-800-345-2550 i can even access it from the cloud tdd# 1-800-345-2550 and trade on any computer. tdd# 1-800-345-2550 with the exact same tools, the exact same way. tdd# 1-800-345-2550 and the reality is, with schwab mobile, tdd# 1-800-345-2550 i can focus on trading anyplace, anytime... tdd# 1-800-345-2550 until i choose to focus on something else. tdd# 1-800-345-2550 [ male announcer ] all this with no trade minimums. tdd# 1-800-345-2550 and only $8.95 a trade. tdd# 1-800-345-2550 open an account with a $50,000 deposit tdd# 1-800-345-2550 and get 6 months commission-free trades. tdd# 1-800-345-2550 call 1-800-578-4439 tdd# 1-800-345-2550 and a trading specialist will tdd# 1-800-345-2550 help you get started today. a talking car. but i'll tell you what impresses me. a talking train.
this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ if you don't have something important to say? we replaced people with a machine.r, what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally.
the inventories going up, and we see the last month's sale originally released at minus 1.6 is now revised to minus 1.4. inventories up, and sales strong and that is the way you want to see the duo of numbers. carl, back to you. >> thank you, rick. and the road map begins with the dow down 116 and across the pond, global indices getting hit hard, and could sell-off be the correction that everyone is fearing? >> the world's second richest man carlos slim is speaking to cnbc and why his wealth drop and what he feels about that. >> and marc andreesen got the stage at the developers conference yesterday. and first, start with the markets now. threats of the global markets, and japan trying the come off of the lows, but it is a
triple-digit decline, and allan young is at s&p capital, and steve from bush capitals. steve, you have a taper tantrum, and is that what we are all having today? >> well, today's market is a taper tantrum, and stole that line from an analyst at wonderlick securities. >> low creeling? >> but it is what is going on and the market is concerned about what the next move for the fed is going to b and it is right to be concerned, but the concerns are massively overblown at this point in terms of what has happened not only in interest rates, but also in the equity markets. the fed is going to be in my opinion very reluctant to take the foot off of the ak sel ccel unless we see the dramatic improvements in the employment market and we didn't see it friday or if we see dramatic, a dramatic uptick in inflation. we have seen the exact opposite and inflation numbers coming in
better pretty much worldwide. i see no reason for the fed to see anything dramatic and maybe they are going to go from buying 85 million or trillion down the 70 or something like that, but good lord, i mean, i see no reason that we have the dramatic moves in equity markets over the fears. they oop peer to me to be extremely overblown. >> aleck, a few days ago, sam stovall on your team boosted the s&p 12-month, because of the notion that the investors would get comfortable with a fed taper, and why is noot happening in the early days? >> well, a 12-month view on a short-term view and when the market hit 1670, we thought we would see a pullback, and we are seeing that. i would disagree with the other guest, i mee mean, if it is no deal, why are the markets moving on it. it is a sea change in the psychology and we have to worry about how committed the central
banks are easing relative to the markets. the japan were to move out and buy longer paper and it didn't do it, and it disappointed the markets and it does not mean that things are tighter, but it means that the markets have discounted a lot of qe and they are disappointed that the central banks are not seen as committed as markets want. it is a headwind. obviously, a bigger problem for bonds that have really rocketed on all of the qe, and so it makes sense that the bond proxies as well as all manner of bonds would be vulnerable to the news, but it is also an issue for the equities and in the near term we think that it is more eq equity volatility. you simply can't count on qe to infinity as a backstop to equity risk. >> steve, i'm very alarmed that you talk about a taper and the dru -- taper tantrum and you belittle what we have been waiting for years to happen. and as alec pointed out, we thought three weeks ago unlimited from the central banks
and now from the feds and the ecb and the bank of japan, that is a huge sea change in temperament that it will not be unlimited and they will not meet the markets forever. this is a huge point in time, steve, surely. >> i don't agree, simon. i don't. i mean, i think that there is a sea change in the short-term psychology here, and i don't know, the central bank policies could have real endearing quality, and we could see this sort of central bank policies that are worldwide for years to come if the economy doesn't -- >> well, steve -- >> and simon, what is going to prompt them to really change the policy? and you are talking about a dramatic sea change, and what is going to prompt them to do it. >> the question is can you artificially hold the interest rates as low as they have been for the global and hugely liquid bond markets? if we keep moving at ten basis points a week which is what we are doing, we will be at 4% on
the 10-year by labor day regardless of what the fed does. >> and then we will be at 30,000 on the dow. >> it won't, because the genie is out of the bottle. >> and it is infinnitum. >> well, no way that the market will do as well the second half as the first, with everybody worrying about it. >> well, everybody is worried about the yet yen and investing with the yen and at some point that is going to end and everybody has covered the yen position, and the topic will change once again to a different currency, and the fact of the matter is that unless the inflation picks up significantly and employment changes, and we haven't seen it yet, you won't see a significant change in the fed or the world policies, and if that happens and truly happens, well, then that is a different scenario, and we haven't seen it yet, and we haven't seen any indication after all of these months of super liquidity that the economy
has gotten better, and not yet. >> not that we are not looking for it, guys. good debate. alec and steve, thank you is much. see you later. >> half past 10:00 eastern, we will hear from one head of the trading desk who believes that the fed could taper from july. the president of mexico signed a new telecom reform bill yesterday and the new law takes straight aim at the business controlled by carlos slim, the world's richest man. we will come back to that. and we have an exclusive interview with carlos slim. in the meantime, to washington to get the latest on the fallout from the security concerns. eamon javers over to you. >> well w we can shg fer to boo saying that edward snowden is no longer an employee. he had a salary at the rate of $122,000 was terminated june 10th, 2013, for violations of
the firm's code of ethics and firm policy. and now june 10th is yesterday. the day after snowden identified himself publicly in the london "guardian" newspaper as the leaker here in this case. in $122,000 salary rate is interesting figure, because snowden himself had described himself as making $200,000, and the boos allen statement says that is his salary rate, and we will have to dig deeper here to see if he was eligible for any bonuses or anything like that, that would have gotten him closer to the $200,000 figure, but still a lot of money for a young man in a government-related business, and when we find out more detail about this, but you can assume for now that snowden is no longer eligible for any bonuses after this leaking incident. >> that is an understatement. thank you, eamon javers. live to mexico and the exclusive interview that we have this
morning with michelle caruso-cabrera talking to carlos slim, and over to you. good afternoon. >> hey sh, there, simon. you mentioned the new telecom reform bill signed yesterday by this country's president takes straight aim at the mexican telecom corporation controlled by carlos slim which is under america movil. he is not under that law, because of the company he founded, but the shares of the company have fallen, and that means that carlos slim is now the second richest man in the world, and not the first. the first is bill gates at $730 billion, and carlos slim only comes in at $66 billion, and makes warren buffett look like a around at mere $66 billion. i asked him how he felt about slipping to number two. >> forbes says that you are no longer the richest man in the world, and bill gates is now the richest man in the world. do you care? >> i don't matter anything.
i have told you many times that. >> how do you think about wealth in general? >> i think that it is a come o compromise. >> in what way? >> well, you need to take care and have the responsibility to how you invest that and how you create more wealth and how you have one side the creation of wealth, and the fruit of the wealth that is providing the income for the people, and through the salaries, and to the investments and to acquisitions that you do or by the taxes that you pay, and go for revenues for the people, and the income and employment. >> i am sure that people think about people like you and people like bill gates, if i were that wealthy, i would sleep better at night. my life would be better. what do you say to them? >> i don't know who say that. i think that what they smoke, and i don't know what they smoke. >> what are they smoking? >> and if you have, and if you
don't have money, you have a stocks of companies. you can companies work with people working and you have markets and you have come ppetis and regulators and you have to make investments and technology reevelution, and you have to improve what you are doing and work hard. >> still, people, are aspirational, right? they'd like to have more money, and they think it would make their life better? >> well, to think that having more money is happiness, they are in the wrong way. i don't know who think that, that having more money is happiness. >> we spent a lot of time on this topic, and i pressed him further and said, come on, when people move from poverty level to middle-class and he agreed, yes, a huge change in life, and i have asked him this before, and he is frustrated by the point, because you are worth $70 billion, it is not a pile of cash, but it is companies and
businesses and things that are running and that is why he sees it as a responsibility. i will be back in an hour of why 60 is the new 30 in his mind. carl? >> but michelle, when he -- correct me if i'm wrong here when it comes to the great wealth -- but gates foundation, and slim has yet to tell us what he is going to do with the wealth, isn't that right? >> so, he's got a foundation that has somewhere between $4 and $6 billion in it. he does not tell people very much about what he does with the foundation. we know for example that recently he decided he would have all of the videos from com academy be redone, and he is going to redo parts of latin america, and he is determined to work out polio, and working with bill gates on, that and i have asked him about that, and he said in this interview that i played earlier, he doesn't care if nobody knows anything about what he does with philanthropy, and he does not want you to
know, and the reason he does not want you to know is because he has a flphilosophy about giving and he read me an actual poem about it by khalil jabron, sands you should not brag about the philanthropy, but do it for other reasons. >> i thought it was extraordinary i and in fact, you can see the video of slim reading that poem to michelle, and we will look forward to your report in the next hour. straight ahead, lululemon's ex-ceo christine day is leaving the company and without much notice. we will talk about downgrading the stock after speaking with management last night, and another who says that lululemon is still a buy. we will be right back. [ panting ]
we're headed the same way, right? yeah. ♪ [ panting ] uh... after you. ♪ [ sighs ] [ male announcer ] it's all in how you get there. the srx, from cadillac. awarded best interior design of any luxury brand. lease this 2013 cadillac srx for around $399 per month, with premium care maintenance included.
the markets around the world are selling off and huge moves on currencies and emerging markets are in difficulty and amidst all of that, the indices are having difficulty with 29 members of the dow in negative territory. and japan is signaling news to the intervention of qe. >> and one stock in particular str struggling this morning and take a look at lululemon with those shares down 16% after ceo christine day announced she is stepping down after 5 1/2 years on the job. she will remain as ceo until a replacement is found, and so as the company holds the shareholder meeting today, what does the shake-up mean for the company going forward? sam poser is an apparel analyst who downgraded lululemon from
buy to sell. and also camilo lyon from canaccord. why is christine day seen as so critical to the future of the company? >> well, she built a good culture for lulu, especially, you know, with the whole service story that you have in the relationship story that they have developed. while they were having the problem with the lu-on pants recently, they chose not the cut the staffing in the stores and kept the people whole which many other companies would have cut the staff if the sales were down, and they chose not to do that and that maintained the r service levels and so on in the stores, and led to them having a good quarter, and raising numbers for the balance of the year. but with her leaving, i think that it leaves a very big question as to, you know, what is that longer term future of
the company, you know, who they put in her place, and i think that since we don't know what that is, that is primarily why i downgraded the stock. >> okay. camilo, look, if we have a 16% sell-off and you think that the company is a buy, this has to be a massive opportunity, and where is sam wrong on the longer term challenges for the company? >> well, you are right. this is an opportunity i think. the fundamental growth has not changed whatsoever, and it is a strong brand with a strong consumer following, and it has growth internationally is unchanged with what we see today, and yet the ceo was the head and did a great job, but with the strength that the brand has today, we don't see that there is somebody who is going to come in to dramatically alter the direction of the company. >> and the question is does the direction need to be altered? because we saw the shares for
lululemon a high-flying stock for a number of months if not years and now it is questions beyond the yoga pants to the warn off issues and how can they compete, because stronger and better positioned rif eed rivals point, and price points competitive, and camilo, should there be a strategic difference of what we have seen in the last few months? >> well, the company is going through the maturation phase, and it goes up and down, and this is one of those. it is a test of the company, and the company's board to see how they manage through it. they have managed through it quite well. they have product back in the stores within 90 days, ahead of what they planned, and they will be back on top by the end of the second quarter, and the importance of the product to the business and it is a amiable and good time frame for them. and not to mention, that they have dealt with the consumers in about as good a way as possible.
i don't think that they have alienated any consumers from the brand and ultimately that is going to affect the trajectory of the growth going forward. >> when you cut the stock to neutral, you put it at $75 price target on it, and now we have fallen below it, and would you be more upbeat after the fact now that we have had the move? >> well, the stock is fairly valued around $75, and it is still a good growth story as camilo said, but it is however not the product that separates these guys, and it is the really the entire culture of the relationships that they have with their customers. and under -- >> but isn't it possible to create an organization that continues to act in that way after you have left it? >> i think that you have seen what happened with apple following the passing of steve jo jobs. i think that, you know, the iphone is no less good, but the
people's respect for that brand, i think that it might have changed a little bit, and that is the risk here with lulu at this time until we find out who the new management is. >> okay. still, a huge move in those shares, and who knows, maybe there will be a resurrection down the road. sam and camilo, thank you for your time, appreciate it. >> facebook is holding their first shareholder meeting and some investors are not happy. and find out why the world's largest pension fund says that they need to growup. and we have a highlight of the meeting operated by tim cook coming up. and coming up is the vice chair of post 9 is gary kaminsky. there he is now.
in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
my mantra? always go the extra mile. to treat my low testosterone, i did my research. my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms;
decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about the only underarm low t treatment, axiron.
market selling off this morning as you know, the dow down 110 and good time to check in with our good friend gary kaminsky at post 9. good to have you here. >> look at the fulcrum and simon is champing at the bit to get to me. >> bring it on, kaminsky. bring it on. >> before we do that, you seem to think that all of this is going to plan and orderly flows and you don't seem rattled on a day like we have had thursday, today, nothing like that? >> no. unfortunately or fortunately having been out again out in the field, and on the west coast last week visiting with the clients and the top ffas, it is normal, and it seems to be money moving into the equities in the right way and the level of speculation and the type of stuff that we saw in the late '90s and the stuff that we saw in parts of 2005 is not there, and it is not to say that it won't eventually get there, but it is boring, normal and it is
reality as a result of all of the qe that had been distributed around the world. >> gary, and you and i talk about duration risks and talk tact people in bonds, and now a front seat here, and what are you seeing? are people taking the pain or moving the equities or what is happening? >> shocked, david. shocked how many people understand duration risks. they didn't get it -- >> so do we need to keep talking about it? >> well, we contributed to people understanding the difference of the bond and the front end, and how did i lose so much money, but the great bulk of people understand the difference of a bond fund that has no maturity and a bond that does. it is not to say that it won't surprise a lot of people, but i'm shocked, david, how many people do know the difference. >> and so talking about the statements and when you talk to the people that you are speaking to, they are not moving out or sort of risked-off so to speak? >> well, i have stayed long and
continue to feel this way again, the money in bonds is going to stay parked in bonds and great rotation is not going to happen. people will move money off of bonds maturing into equities, but not an asset allocation shift which is a result of 2008 that is not going to go away. >> that is the big debate around here, and who to say, jpmorgan pointing out that we saw an increase in allocation and exposure to the equities by the u.s. households in the first quarter, and better signs, and so why, why not more interest from the clients that you are talking to? just demographics or risk appetite? >> well, again, there is an interest, and there is money moving into the equities, but money moving into the assets as well. david's good friend carl bass likes to say a producing asset. an asset that produce a income, and you will see that as an alternative to where some might have looked at fixed income. it makes sense. again, that gets back to it
makes a lot of sense if you can find an inkompcome-producing as >> it is your job to be calm about the markets and that is why you are the vice chairman of morgan stanley, and you are paid to inject calm, and they used to call it a bit of gray on the panel. >> well, i consider my role, simon, my role to try to educate and try to make people understand the various problems. >> let me ask you one question. >> yes. >> and if you are not at all upset about asset classes, what about the funds or the operators who may suffer losses and if you look at the uk as an example, just as a litmus test, and if you look at the hedge fund manager ins the uk today, they are down again because they are exposed to the yen or the computer bonds or some of the assets in the wrong place, and are you hearing anything that would suggest to you that there are major losses from those types of players? >> well, i think that the expectation is that if you are investing in the alternative
space right now, you recognize that this is a period where you will suffer some relative underp underperformance and the likelihood of major directional bets especially carrying bets where you are carrying the trade which is what many of the hedge funds are doing, and the risk is a higher risk parameter and would i be shocked to see a hedge fund blow up and have a long term capital impact, no. again, because it seems to be -- >> would you be shocked to see one blow up or the shock that it would have the effect? which are you saying no to? >> i would not be shocked to see a fund having to liquidate as a result of being on the wrong side of the carry trade, but my prediction is that it is not systemic and we can thank ben bernanke for that leading the entire industry. >> you will be back, gary? >> you are playing me out already? >> well, i wanted to say congratulations to my good friend who just joined morgan stanley and we never got to go. >> and you are a guest who understands wraps. i love that.
that is part of the problem. >> we will see you later. >> see you soon. be good. >> on the show, one stock getting a shoutout from tim cook's developers conference and we will talk to the ceo coming up. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."
here and you say it appears to be a down wund? >> well, the second tuesday down in a row. one never knows how long the streaks can run. >> well, yeah, 21, and was it 20 we got to? >> yes. >> and on the upside. >> we could not join the 21 club, because it is far too exclusive for us. >> we are off of the lows down 75 points and about europe? asia? u.s.? or does the distinctions matter? >> well, several things. you are off because you backed off of the highs of the 10-year yield, and that is critical. you have been talking about it all morning. >> yes. >> and everybody is in on it, and the second thing is that the fed has come in for their slightly irregular qe intervention, and there are a lot of people who tend to wait for that and buy after it thinking that some of the money may show up, but it is very much about the international and what is going on. as you folks spoke about a little bit this morning, well,
while other major markets were down, there was absolute carnage in the secondary markets around japan, the little trading partners near them. >> thailand and indonesia and philippines, absolutely. >> and all down to the equivalent of 700 points in the dow. >> wow. >> that is tough stuff. that ran through everybody's mind, and the cocktail napkin chartist reached into the bag and found that the hindenberg omen, and remember that hindenberg omen? well, it has clustered. we have had five okay kurnlss of the hindenberg omen in the last two weekses, and what is unusual is that it does not happen quite that often. we had nit in the very beginnin of the year 2000. when that was not a launch pad for the market, and also in late spring, well, i should say late summer of 2007, so, at least times to put the alert flag up. >> so seeing more hindenbergs,
and i wonder making the two-year such an important one, because up to this point in the recovery, we have had a positive correlation between the 10-year and how the s&p is doing and in the sense of moving in the right direction and so now we are seeing the opposite happening in the last couple of trading sessions as we are seeing the 10-year selling off, and at 229 and overnight, 2.20, so is this the new trading range and if so, what does it tell us? >> i think so, because the traders in the market are afraid that the fed, and i don't want to make this overdramatic, and i was about to say, the fed is not in control. i think that they're afraid that the marketplace, itself, will begin to make judgments and say, yield should be moving this way or whatever. now, unless you are mario drah
drahi, you cannot just say things and make it happen. we talked about the fomc being like hamlet and not knowing how to make up its mind, but bernanke, and yellen and all of the ws are concerned for one thing, that if they dare to pull back a little bit and things are weak, there is nothing left in the tool box. we are at zero percent. they have traded hard and shoveled hard, and if they step back as the stocks tell them, they are in trouble. >> well, they have tried to make clear that stepping back is not a foot off of the gas, because it is not linear process whatever they do, right? >> so if i step back from the ineffective policy, and there are negative results, ki i can resume the ineffective policy? >> that is the second wave then if they have to come back for more is ineffectual. >> yes, the markets firmly
believe that and that is of great concern to them as well as to all of us. >> perhaps one of the most important tests of the recovery, art. thanks for your time, and when we be watching it for the third straight tuesday next week. ". >> we will talk specifically about what the fed may do, and joining us is paul richards head of fx of the americas, and i imagine that you are having a busy day and you love the volatility. >> yes, i shgs , i love the vo with the stocks, and there will be more, simon. >> we are having you on specifically to talk about what you think that the fed might do to pick up on what art cashin was saying, but i was alarm ed n
behalf of many people in the market to read that your view is that bernanke will discuss tapering again at the news conference in eight days' time, and if the payrolls in july 5, they will taper july 31, and that is a very alarming timetable if it were to be true. >> it is alarming timetable. what concerns me, simon, is that i was on the floor of the new york stock exchange and all i heard was goldilocks. the 10-year was trading at 2.49 and then now we are at 2.21, so that the market is not pricing the fed next week. the bond market is telling you that there is risk to next week. listen, i'm a huge fan of chairman bernanke, and he has done a brilliant man and a patient man, but he is also part of a committee, and the fact that he needs to talk about tapering which is unavoidable at the q and a session next week is enough to put risk in the market. how he navigates that and he is brilliant and he will know how
the do it, but what if we see a strong payroll number two weeks after that, and what do we get july 31? the possibility of a tapering early, and that pure possibility could be enough to upset the market, and that is what the market is seeing at present and hence the volatility. >> paul, is the bigger risk to positioning right now, and actually a strong report or weak one, a strong jobs report, weak one or strong one, sorry. >> without a doubt, the risk is to the upside of a job report. if we see 200,000 number, it would upset things. i was arguing last friday that 15,000 was enough to upset the apple cart on the market, and i'm not trying the say i was wright, but the bond market seems to have reacted in that manner, and that is one thing to look at present. every morning i used to check currency rates and now i check the bonder rates. >> no, you check facebook. >> if i knew how the log on, i wou would, but no, i think that what we are seeing here is that we are seeing the bond market seeing us real clues of where
the risks lie, and the equity market is catching up and we know that the currency market caught up a week ago. >> and it is a risk to the equity market overall what we have again and again, paul, people coming on to say that the flight is to equity, and you will be fine here. let me ask you about in addition the pockets of trouble as we mentioned that the emerging markets have rapidly sold off. we had an asian currency crisis not so long ago when we were not much younger, and does it threaten the market or is this market strong and resilient, and other people's troubles will be to betterment of the market? >> well, i was in asia when the asian crisis took place, which proves i'm old. i think that the market has matured tremendously, and the central banks get it, and development in the world, and china is showing tremendous maturity at the present and even europe will go through the summer without troubles. the focus is on the u.s. right now for the summer. so, no, i don't expect a major meltdown, but a slowing and
emerging markets and right now, we are seeing the clients in particular, major investors wanting to taper down for, to use the appropriate word their investments in emerging markets and investments because they view the opportunities in stocks and residing in the u.s. and to a lesser extent in europe, so i think that when we see a tapering effect in the fed, when it happens we will see a corrective move in stocks but it won't upset the long-term trend, because what has been established by bernanke and the team is quite longstanding and has real basis and i think that emerging markets can 100% withstand that threat. >> good to see you and thanks to the joining us paul richards from ubs and stanford. thank you. >> thank you. and now we mentioned that all three of the indexes are in the red, and the dow is down by as much as 130, but rick santelli is tackling the action from the pits of the cme next. and it is apple's tim cook's
latest app, and marc an dree zen ca calls it the best app he has ever seen. t. winning parks can receive a grant of up to $100,000. part of our goal to inspire more than three million people to rediscover the joy of being active this summer. see the difference all of us can make... together. it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors. where you stand, turn to us. faso you want to save on autoof insurance?. drive a hybrid. get good grades. lose the bling. go paperless. combine policies. make automatic payments. and of course, talk to farmers. hi ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪
welcome back to "squawk on the street" and the santelli exchange, and for a long time, i have said that it is fungible, and it means that if we create liquidi liquidity, the system processes it globally. and it goes through the same process no matter where it comes from and no matter the currency manipulated by a central bank, and investors globally will look for the relative value and find the currency that best suits the structure of leverage, and call it the kerry trade or whatever you like, but if all stimulus is fungible, that means there's another part of the sentence.
that then all leverage is shared equally. yes. in is an important distinction and let's go back the real basics. i would say that every e-mail i have received in the last 36 hours regarding deleveraging in the financial global marketplace talks about these two issues. why? because we really constantly confuse fundamentals with the technical issues. what the fed is doing is a technical issue, and what the bank of japan is doing is a technical issue, and deleveraging is a technical issue, but yet, many times we have assimilated this in the financial culture to such an extent that sometimes, sometimes some of our guests talk about things as if the order of things is normal. it isn't. why is this important? because to take a look at what is going on in the globe and try to think of it from logic is not going the work. even if the fed's taper is
small. it will turn that david into a goliath in the process of the second half of that sentence. in terms of global deleveraging. whatever was created by the fed may indeed only be this big, but at some point, and we have learned very quickly it gets much bigger. now n the old days, i would say when the treasury market 10-year specifically popped through 205, they zoomed up to 223, and they expanded the range and stayed in it comfortably, and last night at 4:00 in the morning, we expanded the range again and in the old days i would say, let's see if we hold the test of 223 and right now we are virtually right there, but that is still looking at everything fundamentally, and in this technical world, where portfolio's volatility is determined by computer algorithms is traded, these
portfolios are going to trade back and you will hear a flush and might not last long, but i fully expect if you follow the volatility, you will be safer than most. simon, back to you. >> good point, rick. thank you. we are seeing a snap-back on the ek i which ti markets today, and down just 69 points. we will have more on where exactly we are likely to trade throughout the day on cnbc. plus, the app that apple's tim cook called out to the stage yesterday, and he says he sees countless possibilities surrounding it in the future. the ceo will join us next. . nt of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines a ng waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] we're headed the same way, right? yeah.
♪ [ panting ] uh... after you. ♪ [ sighs ] [ male announcer ] it's all in how you get there. the srx, from cadillac. awarded best interior design of any luxury brand. lease this 2013 cadillac srx for around $399 per month, with premium care maintenance included. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
i'd like to introduce boris sofman of anki to tell us about his company and their very first product. >> that was tim cook to turned over part of his keynote to a mostly unknown startup called anki. they showed off what appeared to be a simple toy racing game but investors say the technology say it could be the most impressive combination of artificial technology and software. boris, good morning to you. >> thanks for having me.
>> tim cook makes you part of his keynote. can your head even fit through doors anymore? >> yeah, it was a pretty wild monday. that was definitely an incredible experience. we've been -- sorry? >> how did you find out you would even be a part of this yesterday? >> well, it's been a little while in the making. we've been talking to apple for some months, we're going to be selling in apple stores in the fall, and so in the process of all the conversations we caught the attention of some of the executives, and we definitely couldn't say no to an opportunity like that. >> walk me through -- i think the price point is about $200. what are consumers going to get? how is it different? and what is the end game beyond that because clearly this is more about racing cars on an iphone or an ipod. >> absolutely. we'll share more about the product a little later as we get closer to the fall. but fundamentally what anki is is a robotics and artificial
intelligence company. we've been bringing these technologies that is been trapped into the lab for so long into people's lives where they have paccess to products they haven't had access to. it's about interacting with things that were never possible. anki drive is our first incar ration of that technology. it's a racing game where we have physical cars that are intelligent, interactive, they have personality. you can take control of them or play against the game itself with artificial intelligence driving these cars and actually making them interactive and come to life. and so it's the closest way we've -- that we can describe it is you can think of it as almost like a video game happening in front of you in your living room floor. and it's something that is quite a surprise when you see it for the first time. >> you have raised $50 million. that is -- for series "a" and i
think "b" as well, that's a lot of cash in your pocket. can you at least give us some directional clues as to where you direct it after this product goes live? >> absolutely. so, yeah, our series "a" was with andreessen har row wits. mark invested in the company when we were only four people last month. and closed our series "b" with index adventures. a big portion of this is an investment in the future of the field of robotics and artificial intelligence. we're only scratching the surface. a lot of this investment will go towards expanding on the first product, working on our core technologies and pushing it into the future because fundamentally robotics has an opportunity to impact every industry out there. >> boris, this is about more than just video games. it's really about bringing artificial intelligence as someone put it into the living room and can you just in a broad kind of way explain the impact. what does that really mean?
where is this all heading? >> absolutely. what it means is that we're having these technologies that were traditionally trapped in labs or go into defense or space, agricultural, industrial applications and never before coming into people's everyday lives, and here we finally have an opportunity because of mobile devices, because of components that we're able to use, because of al gor r.i.gorithmsalgorithm experiences that were never possible. we started with entertainment because it's familiar, it's comfortable, it's fun. it's a way to really showcase these technologies and have a huge impact in a space that -- in the space of physical entertainment that hasn't innovated much in the past decades. when you look ahead and think of robotics more broadly in the sense of having physical things that are intelligent and behave intelligently with respect to their environment, the sky is
the limit. there's not an tindustry out there that won't be revolutionized. >> boris, a big day for you yesterday. please come back. >> it will be a pleasure. thank you for having me. >> you have to wonder if the guy that's able to allow robots to realize where they are in the physical world, whether he actually owns the future. that will be a huge business. >> exactly. >> tweet time on cnbc. apple releasing a new commercial featuring its slogan, designed by apple in california. the tagline engraved on the back of apple products. what does apple want you to feel with its new ad? tweet us @squawkstreet. we'll have your responses next. [ ice freezing ] [ wind howling ] [ engine revving ] ♪
[ electricity crackling ] [ engine revving ] [ electricity crackling ] ♪ [ electricity crackling ] a quarter million tweeters musicare tweeting.eamed. and 900 million dollars are changing hands online. that's why the internet needs a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this ...is going to be big. it's time to build a better enterprise. together. since aflac is helping with his expenses while he can't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work!
♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at aflac.com. [ male announcer ] see what's happening behind the scenes (announcer) at scottrade, our clto make their money do more.re (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses.
because at usps.com® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small. ap sl releasing a new commercial featuring its motto which is designed by apple in california. take a listen. >> we spend a lot of time on a few great things, until every idea we touch enhances each life it touches.
>> so we asked you what does apple want you to feel with that new ad? you are closing your eyes, you are becoming more relaxed, you are now snoring. christopher writes, what is apple trying to say? let's be honest our customers wouldn't give a about us if they were made in michigan. chris writes, apple wants you to feel your wallet in your back pocket so you pull it out and open it and empty it in one of their stores. >> do we have to censor ourselves? >> there has been a lot of censoring over apple. >> i wond irwhat ter what the s are. >> those suggestions speak to the fact people are a little disillusioned. >> today david called them angry and defensive. >> and the stock has not reacted in a positive fashion. >> see you a little later. if you're just joining us, here is what you missed earlier on.
welcome to "squawk on the street." here is what's happened so far. >> this is not a disaster by any means. it's a 2% economy and we're not going to create enough jobs with this level of economy to get out of the 7s. >> we don't sit down and begin to resolve these issues now, you're going to get to the fall and there will be threats of defaulting on the debt, threats of government shutdown. let's get together and try and resolve these issues right now. >> we're stuck with bris yol to meyers. we're stuck with gilead. i'd like to get those stocks down but they won't go quiet with my negativity. they won't go quiet. >> i don't know what to say when someone really fabulous just kind of exits the building. i mean, it's kind of an elvis moment like where did she go. i don't know. >> would you sell the stock?
>> yeah. >> the fact of the matter is unless inflation picks up significantly or employment changes and we haven't seen that yet, you're not going to see a significant change in fed or central bank policies worldwide. >> what's that longer term future of the company, who they put in her place, and since we don't know what that is, that's primarily why i downgraded the stock. >> good morning. we are live here at the new york stock exchange. let's get a check on markets which have been negative. coming off the lows, but the dow still down 72 points, about 10 points loyer on the s&p 500. the nasdaq off by about 20. lululemon is one of today's biggest decliners. after the company said the ceo christine day is leaving. by the way, some disappointing
details in its earning report as well. you can see the concern among a lot of investors there. >> time for the road map this morning. markets selling off today. dow is off 71 though. close to session highs on these worries out of japan, germany, all around the world weighing on investors. we'll tell you how to navigate this volatility. plus, our boss, comcast chairman and ceo brian roberts will join us live in a few moments. and then facebook holding its first shareholder meeting today. we will be joined by one of the shareholders who says facebook needs to grown up. and then sony unveiling the playstation 4. >> we'll start off with the markets. the dow coming back after being down triple digits earlier but concerns about the fed and global markets weighing on investors. dan greenhouse is chief global strategist at btig and a cnbc contributor. da d dan, good morning. let's talk about the fed and the
conversation we're hearing around here and a lot of people in the market boils down to whether or not people have confidence that the fed can move from a position of supporting the market to a taper without really upsetting the apple cart here. what's your view? >> our view is really quite simple. it really boils down to the fact that we don't understand why the fed buying 65 or $75 billion worth of bonds instead of $85 billion is a reason to freak out either on the rate side of things or on the equity side of things. there are numerous instances of things like this happening and we put out a note recently let's be clear, the fed tapered qe1. it wasn't called tapering. it was just pacing out the end of the program, but the fed was supposed to end qe1 at the end of 2009 and they ended up ending it in the first quarter of 2010 and there was not a meaningful sell-off in equities. that doesn't mean there shouldn't be one now. it just means i don't know what people are freaking out about.
>> each time the fed has tried to pull away to end the qe programs, et cetera, markets have sold off, rates have rallied. we've seen this concern about the economy not being strong enough. and the question now is if the fed is serious about heading for the exit because it feels like conditions are more sustainable now and we get a sell-off, what happens then? >> okay. first of all, with respect to the point about when the fed has ended previous programs and to be clear, kelly, every meeting i go to, this concept comes up, the correlation between the fed's balance sheet and the stock market. the two times that they've ended qe1 and qe2, things got in the way. in qe1 it was a downgrade of spain. the second time you had the debt ceiling. stocks and the economy didn't slow down -- >> you're saying the fed if it weren't for those things could have exited two years ago. >> well, should they and could they are two different things
but in theory, if those two events hadn't happened, particularly the latter, i think we would have been done easy two years ago. whether they should have done that is a different story but they tried. >> and that brings us to today. having not necessarily an event like that staring us in the face although on a day like today there are still obviously some concerns out there, but the question then becomes, okay, can they head for the exits then? can they begin this tapering process and again not that that necessarily spells disaster for markets here but we're probably going to go through a period of trying to come to terms with what exactly that does mean. >> from a purely he can quit standpoint, the question isn't whether the fed can or should. ignoring the more esoteric aspects of this debate, we can look at this on a surface level and look at previous instances, and my favorite example which i use all the time is the spring of 2003. after a 25% rally or so off the
bottom in march of 2003, the bond market gave up and the yield on the ten-year bond rose by 150 basis points in just three months' time. the s&p 500 which again had rallied off the march low, fell 5%. you saw something similar at the beginning of 2004 when the yield on the ten-year rose from 3.7 to 4.9. the stock market fell 8%. i'm not saying there shouldn't be a direction as equities begin to reprise but the idea that the entire thing, the entire recovery, the entire equity rally is built on some falsehood that's going to fall apart at the faintest sign of higher interest rates is something i disagree with. >> but if we're going through this period like a 2003-2004 situation, first of all, do you have a sense of where the ten-year might be headed? where fair value might ultimately be if we're taking of the risk premium out of markets and heading back to something that prices in a more sustainable recovery. >> two things. our house view is for 225 end of
year 10-year. obviously we're there this morning so we're a bit early to say the least. i think ultimately you will see that come down. but i would remind investors all the time if you look at more than one or two-year chart, we were just at a 3% yield in 2010, just in apostrophes but you could in theory if the economy was expanding, if this continues and the fed begins to wind down its increasing asset purchase program, you could see yields drift back up over the next 6 to 8 to 12 quarters back to that 3%, 3.25% quarter. >> we put the question to our guests earlier saying what's the bigger risk to positioning? an unexpectedly strong jobs report or an unexpectedly weak jobs report? he said a strong one. >> what's the risk to equities? >> yes. >> oh, weak. >> a weak one, and the reason being? >> at the end of the day what matters for stock prices,
there's a number of things obviously, but what you want is not central bank accommodation. you want an improving economic backdrop. you want growing corporate profits and profit margins. these are the types of things that are coincident with job growth. while certainly a 50,000 print on a nonfarm payroll report will spook the market, the fact is i'd much rather have 250 than 50. >> dan greenhouse, great to see you this morning. >> my pleasure. >> comcast chairman and ceo brian roshberts will join us, b first rick santelli. >> i have great respect for dan, as do many on the floor, but imagine his comments in a mirror. and when they come back, that's what i'm going to talk about with art nolan. is the economy great? i'm not sure. are all rate increases the same in their behavior or their impact on stocks? nay, nay, i say. show up in 20 minutes.
you'll hear the other side of the story. [ male announcer] surprise -- you're having triplets. [ babies crying ] surprise -- your house was built on an ancient burial ground. [ ghosts moaning ] surprise -- your car needs a new transmission. [ coyote howls ] how about no more surprises? now you can get all the online trading tools you need without any surprise fees. ♪ it's not rocket science. it's just common sense. from td ameritrade.
take a look at the financial sector. it's down sharply today. some of the biggest decliners weighing on the broader market. josh lipton is back at hq with more on this. >> financials leading the charge lower. spoke with fred canon earlier. he chalks up the selling to two primary reasons. the sector has an above average
beta, it tends to be more volatile and the overall market. sector has enjoyed a nice run, so some profit taking is not surprising. he does not think it's anything fundamentally driven. the yield curve is steepening. he's saying it's more technical in trading than anything else. >> josh, thanks so much for that. protests raging in turkey today as riot police clash with protesters in istanbul's main square. richard engel is live with more. richard, good morning. >> reporter: good morning. there's been a new development just in the last few minutes. we are seeing for the first time protesters clashing with protesters. this country is divided and these protests represent the deep split. on one side you have the police whot are representing the government, representing the prime minister erdogan. and prime minister erdogan democratically elected three times in a row, a strong u.s.
aa al ally, he's overseen a period of prosperity in in country. on the other side, the demonstrators who say he's become somewhat drunk on his success, that he no longer accepts criticism, that he's authoritarian and that he's trying to impose an islamic agenda. those were the demonstrators who were out here this morning when the riot police moved in. there have been clashes back and forth between the two sides all day. and then just in the last few minutes we've seen some erdogan supporters coming in backing up the police and throwing stones at the protesters as well. >> richard, thank you so much for that. richard engel joining us from istanbul as we get a look at some of those incredible pictures of the protests. when we come back, facebook holding its very first shareholder meeting today. we'll talk to one shareholder who says facebook needs to grow up. that's coming up next. later, it's the talk of the gaming world and the twitter
oil and gold caught up in the sell-off we're seeing across markets. let's get a check from bertha coombs. >> today the weaker dollar certainly not helping the commodities complex here at the nymex. we have oil lower. also adding a bit of pressure, opec out with its monthly report saying that last month they produced more oil than they have targeted. also they are lowering their outlook for the full year 2013
in terms of the demand although they do see slightly higher demand in the second half, but they say the risks are to the downside. with this market so well supplied, today we're seeing a bit more pressure and risk to the downside for brent, which is more of the international benchmark these days than wti nymex crude. we will get another report from the u.s. energy department later today in terms of its monthly report and, of course, we'll be starting to look ahead to inventories. but the interesting thing is if you look at year-to-date, despite the fact we've seen this commodity sell off, oil has done better than gold and the metal it's. gold down 18% year-to-date and we continue to see pressure on the precious metal today. blackrock saying that exchange traded products saw big outflows again in may in gold although down from april, and nonetheless, some folks are perhaps starting to do a little bit of bargain hunting. the gld did say that yesterday
they saw one of their biggest inflows into the fund in a very long time. carl? >> interesting given everything else that's happened around the globe in the past 24 hours. thanks a lot. facebook is holding its first ever shareholder meeting in san francisco and the company may have to face some unhappy investors. stocks down over 35% since the ipo and recently there's been a constant stream of insider stock sales. the second largest pension fund in the u.s., aesha is the an investment officer there. good morning to you. did i get my holding count right? how much do you own at this point? >> that is correct. about 30 million. >> you take this morning as -- that you want to see them grow but you also want to see them grow up. what do you mean? >> well, facebook is a young and hip company, we're happy they're doing better, but we think they have some governance practices
that are quite archaic and we want them as they come into a more mature company have more mature governance practices. >> are you referring -- is this about diversity on the board or something more material to operations per se? >> it's a combination of things. it is about diversity on the board, to be more reflective of their user base. it's also about their compensation practices and we just want to see them be a more mature company. >> i know there's been long-term complaints about the dual class ownership. something that you have been dealing with since the offering. there's always that thing where we sort of push back on calsters or calipers or anyone and say if you don't like the class ownership, you can buy another stock. why get into it in the first place? >> quite frankly, facebook is part of the index, and calsters is an index investor. we're going to be in these shares forever, and the fact that they have a dual class
structure and that the economic interests don't match the voting power is the issue that we have a real problem with because shareholders are basically handcuffed. we don't have any say in the board room or the governance structure at the company. >> that's a fascinating point. you're saying you're forced to buy these shares, you don't really want to hold them, you don't really like the story with the company. >> well, we like the story with the company. we think facebook is doing better. they did add a new woman to the board which we were pleased with. but they are part of the index and we're index holders. we own the whole market and we're going to be in these stocks forever. >> is that the right way -- why do you have to hold these stocks? wouldn't it be better to be a little more selective about it? >> we see the fact that we are owners in these companies, it allows us to engage with these companies and be more proactive,
and it's a way we can effect change in the marketplace. >> i'm not sure how granular you can be on their quarter, but people are going to be looking for updates on user engagement, on user growth. do you have any expectations going into the meeting today? >> you know, not necessarily. you know, we're long term shareholders. we're not looking quarter to quarter. we want companies to do well for the long term. you know, our liabilities are 20, 30 years out, and so we're not looking quarter to quarter. >> if i'm facebook and i know, as you just said, you're going to be in the shares forever, you're not really looking that much quarter on quarter, why do i care what your view is on how i run my company at all? >> well, because we are a shareholder. facebook, you know, they came to the capital markets for capital, and we're an important, influential shareholder. facebook is a california-based company. we're in california. and like i said, we're long term
capital, long term shareholders. >> what do you make of some of the insider sales and then, of course, there's always the question of zuckerberg and if one day he will sell some of his 60 million shares. he's promised to hold onto them until at least september. but i wonder how much liability you think there may be on the float after that. >> well, it is always concerning for us when insiders are selling, but we want to make sure that the holdings that the executives and the board members have of facebook, that they're aligned with the shareholder base. so we just want to make sure they still have an alignment going forward. >> all right. we'll leave it there. one of the biggest investors in the u.s. >> thank you. >> comcast which owns cnbc's important company just unveiled new technology for its you be describers. live from the national cable show, our julia boorstin joins
us with comcast chairman and ceo, brian roberts. >> thank you. thank you for talking with us today. you just got off the stage where you unveiled the next generation of comcast operating system, x2. tell us how it's different. >> it starts with our goal, which is to take all the intelligence out of the cable box and put it in the cloud. that allows us to innovate faster. we have made over a thousand changes since x1 in only a year, so it's smarter, it's personalized, it's easy, it's fun, and it's beautiful and prettiest work we have done and at the same time gets you to your content faster. it learns about your behaviors and your preferences, and we're pretty excited. you can talk to the remote control and change channels or do a movie search or an actor search. a whole lot of things. you have to play with it and i think you'll get what we're excited with. >> you played with the voice
control yesterday. that was pretty cool. i thought it was interesting you're integrated you tube. you're allowing people to search for content on the table networks or youtube. i'm wondering why you're featuring youtube. >> it's really web content. if you say i'm a passionate golfer was one of the examples we had and you can see golf movies or you could see golf tournaments or here is how-to videos or clips that are of interest to me, you want all that information. so we want your experience, your entertainment experience, your relationship with comcast to get you to your content faster and make it more fun and relevant and web videos are coming on strong and people want them on bigger devices and we want to make that as seamless and easy as possible for you to enjoy. >> you're also incorporating home controls. how big is this smart home market for comcast? could it boost your bottom line and when? >> broadband is the fastest
growing part of our company. and what are the limits to broadband? in some ways almost nothing. we want faster speeds and one of the things we showed today was over 3 billion bits a second running on a cable second. that's 300 times faster than first time i demoed broadband just a few years ago. we are looking for applications and home energy management, home health care, the security, video cameras are all things that need broadband wireless with your fastest in home wi-fi and your broadband connection and so we're trying to make it simple and easy for our customers and so one of the things we showed was you can look at your energy management. it saves you energy. you can change your thermostats, your lightning, and then you can display it on your tv set and see how much you've accomplished. if you want to change settings, you can do it on your smartphone, your tablet. we don't care. we want our ecosystem to be the same, simple, and easy to use
with products that matter. >> are these features really to keep people from cutting the cord? >> it's to keep people engaged with us and take sang advantage of this technological explosion that's happening, whether it's more tv choices. we're up to 40,000 on demand choices. or whether it's tv everywhere. whether it's -- we've increased your broadband speeds 11 times in 11 years. the cost per bit is plummeting and the value is rising. we're obviously trying to get you to the engage with our products and, therefore, to want to do business with us and we've got to give you great service so we spent a couple billion dollars improving our customer service and working every day to make it easier and using online tools. we're showing here at the convention how you can self-help and some of the things we have planned for the second half of the year are a whole other level
of service innovation and self-control by the consumer. it's the whole package of the experience and obviously we then hopefully have a good business if we can do all that. >> now, there has been quite a bit of discussion here at the conference about cord cutting. do you think it's a threat to your business? >> i think there's a reality that not every consumer wants every product. giving more choice to consumers is what we have to do. if you add up the total number of homes that take multichannel video, it's actually the same as it was last year, the same as it was the year before. as we start to get housing growth back in the country, that's going to increase the number of homes, but some younger consumers, some don't take all our products, just use the web, that's why we need to have the best web connection. and so, you know, my goal is not to always know what every consumer wants but to make sure our company moves quickly, has the best platform, and is open minded to the change that is
part of our daily lives. but, no, i think many, many people love their television. the other thing you see at this convention is ultra high-def, 4 4k coming on strong, cheap cameras, the lower cost devices. four times the picture quality and you sure want that big screen in your home at the same time you want a tiny screen. >> you mentioned broadband speeds. on stage just a couple minutes ago, you showcased some really, really high speed downloads, and there's been a lot of talk about google getting into google fiber and saying that it's 100 times faster than average download speeds. as you push into these faster speeds, do you see google fiber as a threat? >> well, i don't know whether google fine ser a good business or bad business for them and how ubiquitous it will really be. we are in many, many homes. we offer the fastest internet today. the more consumers want speed, the better it is for our company. that's been true for a decade, and what we showed today is we can go way beyond the speeds we
offer today without having to rebuild our plant, without having to make significant investments like starting over and digging up all the streets and so i think we want applications and if companies like google create momentum in those applications, we've said to them directly, we want consumers to need more speed because that's going to be a growth business for us. if there's more competition, so be it, but i'll tell you, i like our position and i think we're showing that our network is robust and can handle it and we want that challenge. >> as consumers use those high speeds to stream for video content which is obviously very popular, do you see the possibility of tiered pricing or usage-based pricing. >> we have said we're going to experiment with that. today we have a couple different options in some markets that we're testing. ultimately we'll make determinations as we go, but the network we want consumers to use
as much as possible. how we price it, we'll always evolve and change year in and year out based on what those needs are. it's not just video. now you have a web cam, it's on all the time. is that taking up bandwidth? what type of camera do you want? is 4k coming? it's an exciting time. we want more usage. >> certainly a lot going on. i have to ask you about a new entrant into the space and potential threat or disrupter, are o. the question is do you see them as a threat? >> i see right now a lot of legal challenge to aero. both the cable side and the content side of comcast nbc universal. we think that it's, you know, not a legal system, and it will be challenged in court and we'll have to wait and see how that plays out. >> would you consider turning nbc into a cable network as news corp. and disney have talk -- i'm sorry, and cbs have talked about doing with fox. >> i think it's premature, but i
do think that retransmission consent was the will of congress. it was challenged in the supreme court, it was upheld. so it seems pretty clear to us that when it settles out, there's a reasonable likelihood that the courts will continue to find that. if they don't, we'll have to deal with it then. >> carl, do you want to jump in? >> brian, some of the early reviews are salivating over the voice recognition element of x2. you can say show me movies about basketball. it will find those for you. i just wonder from a user experience, is the remote going away? just as a hand held concept? >> i don't think so. in fact, one of the things we played with the last year is everything from gesture to voice to your key stroke, and the answer is there's no answer. it's a little bit of each. there's times when one is better than another. and so we also want to find the easiest way for the consumer to enjoy it. we're very open-minded to partnering and evolving this experience. what we found is the more
complicated the search, the more you want something very specific to you, it's a lot of key strokes and if you could just say find don cheadle and then not only on television, in libraries, on movies on channels and on the web, i get all that actor's information right there one place by speaking that command. that's really cool. but if i just want to change channels, it's probably an ingrained habit to just push the up/down button. we built it into the row motor as compared to having separate devices and i think it really will be a beginning of a game changer. we've been working on it for a lot of years. >> we talk seemingly every day about the notion of binge viewing which obviously this is aimed at as well. with all of that happening and all of these big deals at netflix and so on, is the future of linear television going to be limited to live sports and awards shows? just almost like a niche market?
>> i don't think so. you know, the rush to want to overly react to small changes in behavior is not the likely jute come. i think there's going to be linear channels, but those of us who run linear channels need to understand that consumers have so many choices they may come on something when it wasn't on live and they want to now catch up and so one of our elements of our guide is to tell you where you are, help you through that process a lot faster and easier. at the same time, advertisers still want to know that's the content, the network wants to relate you to the advertiser. so having dynamic ad insertion is big step that we've taken where you now can put a relevant ad in an on demand asset and at the same time i think there's an element of lean back that we all do when we come home and watch tv and what's on. i don't think that's going to change anytime soon.
i couldn't get too overly panicked one way or the other. i think it's just enhancing the experience and more engagement and taking advantage of the world we live in where sometimes you want it right now and sometimes you want to wait. >> brian, it's about been four months since you completed your buy out of nbc universal. where is your perspective now on what the company's potential upside is? >> well, i think the team at nbc universal, steve burke, have a lot of momentum. we have many different businesses. we're impressed with the leadership team at all our businesses. everything from theme parks, having a great first quarter, to cable networks. always got to mention cnbc while i'm here and how relevant we are all over the world. the film business, we have the top one and two movies in the nation this week with "the purge" and "fast six" and nbc broadcast and the sports, we have the olympics coming up next
year, some exciting pilots, more diversity in the pilots with everything from an exciting show "crisis point" that's coming up after the olympics. michael j. fox coming back to nbc, and i don't know, i think it's an exciting time. over in the cable business, neil smit and the team are executing incredibly well. we're adding customers. our broadband business, our phone business, business services. we haven't talked about that and we raised money in the capital markets. execute, focus, a lot on our plate but i think things are going well. >> cool new x2 features we'll be rolling out this fall, including the voice control which was very cool. brian roberts, thank you so much for joining us at the national cable show. kelly, back over to you. >> julia, great stuff. there's only one right answer to
where nbc universal is headed, right, carl? >> help me out. >> parabolically higher. >> do you think i'm going to step in the middle of that? >> that's what i'm here for, to set traps for you. we're just ever so negative on the day. when we come back we'll find out whether that 150-point loss we were looking at earlier will be a positive close. the first time it's happened since 2011. stay tuned. [ male announcer ] i've seen incredible things.
otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
breaking news from going. . they are announcing the closing of the acquisition of ways. they're going to work closely with the ways community they say. the development team will remain in israel, operate separately for now. add they're excited about the prospect of enhancing google maps with some of the features they will get from that deal and that happened fast. >> it looks as though they don't want to waste any time with that acquisition. >> meantime, turning our attention to lngos angeles, the big reveal for sony playstation 4 at the e3 conference. anybody into video games knows this is the place to be. our own jon fortt is there with another first on cnbc. hey, jon. >> i got zach tretton, thep s4 making its live tv debut on cnbc. big deal last night. you announced the pricing at
$399. the crowd got very excited about that. also very excited about the fact that you're not going to restrict used games on the console versus microsoft coming out 100 bucks higher and saying they are going to have some restrictions on how used games come across. why in particular from what you're hearing directly from the community and gaming were they so excited. >> i think we have had a great relationship with our consumers since we introduced the first playstation back in 1995 and the tenets that apply then apply today. think about the consumer first and foremost, focus on gaming, and deliver great value for the investment. >> can't help but notice, while it was something like a 25-second sustained round of applause, we haven't seen anything like that in many years, it was about things that sony is not going to do withp s4. how do you get people excited about what sony is going to do? how are you going to differentiate versus nintendo and microsoft? >> i think you pointed out a key
reaction. people are very happy with the ecosystem in gaming and they weren't looking for it to change. it was a response to the recognition that we understand where they're coming from, and i think the goal again is similar to what it's always been. a great entertainment experience not only in gaming. gaming first and foremost but really delivering that multimedia experience. we did it with dvd back in playstation 2 even with audio dd in the original playstation. that entertainment experience continues to broaden. i think it was a pretty big announcement last night to show we're putting the weight of sony behind it and going to involve our sister company sony pictures entertainment bringing great original content. >> speaking of broader sony, talk to me about the business model a little bit. traditionally when a console comes out, it comes out at a lower price point and you lose money expecting to make money later on the games. given where sony is right now trying to get profitability, how much money are you losing on this consol and what's the path
to profitability? >> question don't get into describing what our costs are, but i think the goal is obviously profitability. it's traditionally been called a razor and razor blade money. you lose money on the hardware and make it up in software. i think we have a good business model. we've designed the playstation 4 that's going to be developer friendly, consumer friendly, and hopefully something we can monetize as well. >> i have been wondering is this the consol's last stand in the sense that you have got mobile on one side from smartphones and tablets eating up a big chunk of the gaming market. oshd, on the other side, thep c market is having a resurgence with people playing games through cloud platform. what is the place for a consol? why are you confident it can survive? >> it's a great question. i have been answering it for 27
years. i came into the industry in 1986. i was told the video game consol was a toy, it was going away and eventually people would be gaming on the thipc. there's a renaissance going on with a billion people gaming worldwide. i think the consol is the ultimate gaming experience. people tend to migrate up the food chain to the dedicated consol. i think it will outlast my career. people are going to be enjoying the consol. its mainstream entertainment. gaming is bigger than box office and the music business put together. people will gravitate toward the experience in the living room. >> is it more on the back end lower cost games through services, other ways of making money off of a consol? >> i don't think there's ever been a better time to be in the games business. there are more consumers gaming today than there were 20 years ago. so there's a great market for a
high end consol and gamers still respond to the big budget games, the games that deliver that big immersive experience and there are certainly the bite sized experiences. but it's still going to come down to the blockbuster games that drive the consol. i think the health of the consol business is better than it's ever been. this is the seventh season for this. traditionally life cycles were five years. if you take it out to a ten-year product life cycle, it's impress sif. >> thanks for being with us. ladies and gentlemen, once again here it is the ps4 first on cnbc. here is the controller here. pretty nice. hopefully they'll sell. >> i don't know, jon, you didn't look very comfortable. i'm guessing -- are you in the 1 billion, jon, the 1 billion gamers worldwide? >> you know, i'm not as big on playing consol games as i used to be. i have got two toddlers running
around the house. just don't have the time. >> join the club, brother. >> jon fortt. >> it's been a rough day in europe and they performed far worse there than we have in the united states. the court challenge in germany to the ecb's threat to buy bonds to stabilize the market is under way. i think the most important thing to come through so far is that it's been said there's not going to be a haircut anytime soon on any eurozone member. it's important because the tail risk has risen that greece could become a problem again. check out the close around europe. you will see that there is an awful lot of red on the screen and the greeks in particular, certainly the greek banks, fell heavily today. this is because they have been unable to sell the natural gas
operator and, therefore, there's a hole in the budget for next year and there is a suggestion that ultimately because of where thei mf is, that that will have to be filled by hair cuts by government on greek debt. i would just show you what's happening in the uk where again the world's largest quoted hedge fund is in negative territory. we lost 18% last week because it may be on the wrong side of some of those trades. you see these big insurers beginning to fall. you may see that around the world. i want to show you the move we've had on yields at the center of europe. you see treasuries spiking higher, so you see the yieldings on the french and the german bonds spiking higher and on the periphery. that in europe is more important. italy and spain, you don't want
to see too much of that. >> some of those moves, major moves. maybe that's why we saw some pressure coming off the market here because the european seller was going away. bob, because we haven't really seen much move in the ten year, it's up 223 now? >> it really was. this is more about the bond market than the stock market. look, the stock market started turning around when bond yields started moving down, bond prices started moving up. look at an intraday. there's the s&p 500, that green line. the white line is 10 to 20-year treasuries, the tlh. as the prices moved up, the u.s. market moved up. bond yields are really impacts things today. some of this has to do with higher interest rates overall here. but we've had a couple weeks now where higher interest rates have really put pressure on emerging markets. thailand, the philippines, india, look at the decline. this is just today. we've got to get some stability
in interest rates. just want to point out the base metals. big declines that we've seen recently in some of the commodity stocks. there's your sector to the downside today. >> bob pisani from the floor. now as we mentioned, google officially has acquired ways. the ceo was just on the show. here is what he had to say about google. we are back. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
♪ bonjour ♪ je t'adore ♪ c'est aujourd'hui ♪ ♪ et toujours ♪ me amour ♪ how about me? [ male announcer ] here's to a life less routine. ♪ and it's un, deux, trois, quatre ♪ ♪ give me some more of that [ male announcer ] the more connected, athletic, seductive lexus rx. ♪ je t'adore, je t'adore, je t'adore ♪ ♪ ♪ s'il vous plait [ male announcer ] this is the pursuit of perfection.
oh, he's a fighter alright. since aflac is helping with his expenses while he can't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at aflac.com.
coming up on the halftime report. there's no hiding from this market volatility. and what does one lock-time facebook feel buying the stock. and lululemon getting hammered. the buying opportunity many have been waiting for. our traders go toe to toe coming up top of the hour on halftime. >> that's coming up in under ten minutes time. and coming up what the ceo of waze had to say when he was on this program.
google announcing a few moments ago it's closed the acquisition of waze. they announced the transaction on its blog. financing details have not been known. the ceo appeared on "squawk on the street" in september and spoke about competition with google maps-here is what he had to say. >> think about wikipedia, the way they built an encyclopedia unlike britannica. same thing we're doing with maps. by allowing users to do it, local people living in their neighborhood are solving problems that matter with them. that's why we can build a map that's global. we've users everywhere in the world. we can do it on a reasonable budget and we don't have to be google to do it. >> wikipedia is not perfect though and when you're driving little imperfections really matter. >> that is true, although there's strength in numbers. if you can't beat them, join
protect your family... and launch your dreams. at legalzoom.com we put the law on your side. yeah... try new alka seltzer fruit chews. they work fast on heartburn and taste awesome. these are good. told ya! i'm feeling better already. [ male announcer ] new alka seltzer fruits chews. enjoy the relief! [ male announcer ] new alka seltzer fruits chews. fso you're worried about housef fires? stop smoking. manage your wires. watch out for space heaters. clean the chimney. get one of these. cool the romance. and of course, talk to farmers. hi. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪
dow at its low this morning was down 152, and the last time the dow closed higher, closed higher after being down at least 150 intraday back on october 4th, 2011, that's going back a ways. we'll see if we can close above that level. >> it's also a triple digit move. >> let's get to melissa lee at quarters and "the halftime." . welcome to the halftime report. four hours to go until the close. what a turn around in the markets with the dow briefly turning positive. the s&p 500 had been down as much as 17 points beyond here. right now we're down by about 5, 1637 is the level. on the nasdaq we were down by 0.4%. saving face, a long time facebook bearer joins us with a preview of what to expectro